Archive for 2012

A professor stood before his philosophy class and had some items in front of him. When the class began, he wordlessly picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full. They agreed that it was.

The professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles roll
ed into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar was full.. The students responded with a unanimous ‘yes.’

The professor then produced two Beers from under the table and poured the entire contents into the jar effectively filling the empty space between the sand.The students laughed..

‘Now,’ said the professor as the laughter subsided, ‘I want you to recognize that this jar represents your life. The golf balls are the important things—-your family, your children, your health, your friends and your favorite passions—-and if everything else was lost and only they remained, your life would still be full. The pebbles are the other things that matter like your job, your house and your car.. The sand is everything else—-the small stuff.

‘If you put the sand into the jar first,’ he continued, ‘there is no room for the pebbles or the golf balls. The same goes for life.

If you spend all your time and energy on the small stuff you will never have room for the things that are important to you.

Pay attention to the things that are critical to your happiness.

Spend time with your children. Spend time with your parents. Visit with grandparents. Take your spouse out to dinner. Play another 18. There will always be time to clean the house and mow the lawn.

Take care of the golf balls first—-the things that really matter. Set your priorities. The rest is just sand.

One of the students raised her hand and inquired what the Beer represented. The professor smiled and said, ‘I’m glad you asked.’ The Beer just shows you that no matter how full your life may seem, there’s always room for a couple of Beers with a friend.

….On the other hand, Newsweek has reported that law-abiding American citizens using guns in self-defense during 2003 shot and killed two and one-half times as many criminals as police did, and with fewer than one-fifth as many incidents as police where an innocent person mistakenly identified as a criminal (2% versus 11%).

It is crucial not to ignore the abyss that lies just beyond the fiscal cliff. It is alarming enough that our federal debt has surpassed $16 trillion. But we have actually dug a fiscal hole of more than $71 trillion when you consider our unfunded Medicare, Social Security and other retirement obligations. This amount goes up more than $100 billion a week on autopilot.

World economic growth has weakened substantially this year and faces the confluence of a triple threat — the so-called fiscal cliff in the United States, the European debt crisis and a sharp slowdown inChina, the United Nations said in a report released on Tuesday. The worst case, the report said, could be a new global recession that mires many countries in a cycle of austerity and unemployment for years.

The London-based Think Tank Legatum Institute recently offered empirical evidence of what many Americans have been thinking lately. Our national well-being is slipping.

Over the past four years, prosperity has increased around the globe, while it has remained stagnant in the United States, the Legatum Institute reports. As a result, the Institute ranked the United States 12th out of 142 countries on its 2012 Prosperity Index, putting the country outside the top ten for the first time…

The Legatum Institute finds that a decline in entrepreneurship and economic opportunity, rather than slippage in education, health, safety or personal freedom, is to blame.

In particular, the authors say that the fall in prosperity:

“. . .is driven by a decline in the number of US citizens who believe that hard work will get them ahead.”

It’s about time America got taken down a peg or 10. Who do we think we are, being all prosperous and stuff? That’s not fair to all those other countries. It’s time to give them a turn at being rewarded for working hard and innovating and taking risks. We tried that for hundreds of years and it worked really well, and I can’t think of a better reason to stop.

The very idea of people voting with their feet is uncomfortable to some politicians. Fortunately, others realize the damage that a declining tax base causes and prefer transparency over attempting to delete statistics that reveal the problem

Between 2010 and 2020, the BLS estimates that the total number of U.S. jobs will increase by 20.4 million, from 143 million in 2010 to 163.5 million by 2020. The number of jobs created this decade in the top 30 fastest growing occupations – 9.3 million – will represent almost half of all of the new jobs created by 2020.

What’s really interesting is that only five of the top 30 occupations expected to create the most jobs by 2020 require a college degree or more (nursing, post-secondary teachers, elementary school teachers, accountants and physicians), and ten of the fastest growing occupations don’t even require a high school diploma. Moreover, of the top nine occupations expected to create the most jobs this decade, only one (nursing) requires a 4-year college degree.

Perhaps the biggest shame of the modern U.S. fiscal era is the government’s decision to keep rolling over its debt in fairly short-term instruments. In an ideal world, all of the government debt that has been issued during the past few years would have been in 20- or even 30-year bonds. That would remove a great deal of interest rate risk that the government faces. Instead, the vast majority of government borrowings have been in one or two-year debt instruments, which means Uncle Sam will be rolling over trillions of dollars in debt from 2013 to 2015 and beyond. That’s no problem if rates stay low, but it will create a fiscal nightmare if that debt gets rolled over at ever-higher rates.

Famously, Milton Friedman always said that the true burden of government is what it spends, not what it taxes. While correct up to a point, his statement has unfortunately led many conservatives to believe that the budget deficit is of no economic importance. That is to say, they believe there is nothing to be gained by reducing the deficit unless it results from lower spending, because that and that alone reduces the burden of government, and reducing the burden of government is the only thing that will raise growth.

Police say about 5:30 p.m. on Dec. 3, a man walked into Modern Nails at 2645 E. Second St. and asked a female employee if she wanted to buy some diamonds. The man walked toward the front desk area and the woman replied that she had no money to buy diamonds.

A witness said the man then reached into his coat pocket and began to take out a silver-colored pistol.

At that moment, a woman who was getting her nails done reached into her purse and got her own firearm. Police say the man never fully raised the gun and left the building after seeing the customer had her weapon out.

The comparison between “countries” is somewhat arbitrary. The population range for the countries in this set spans two orders of magnitude: millions to hundreds of millions. Their ethnicities, geographies and densities are different as well. We must be careful in drawing conclusions when comparing small, relatively homogeneous countries such as Finland against a population with the size and heterogeneity of the US

The father of Newtown Connecticut school shooter Adam Lanza is Peter Lanza who is a VP and Tax Director at GE Financial. The father of Aurora Colorado movie theater shooter James Holmes is Robert Holmes, the lead scientist for the credit score company FICO. Both men were to testify before the US Sentate in the ongoing LIBOR scandal.The London Interbank Offered Rate, known as Libor, is the average interest rate at which banks can borrow from each other. 16 international banks have been implicated in this ongoing scandal, accused of rigging contracts worth trillions of dollars. HSBC has already been fined $1.9 billion and three of their low level traders arrested.

A ‘self-fulfilling recession’ is a long-established idea in economics. This column argues that the US’s economic malaise continues to be caused by leaders’ hysteria rather than by actual engrained economic problems. Obama and Congress need to stop scaring the nation about the ‘fiscal cliff’ because, ultimately, they are coordinating expectations on there being a recession. Tackling the right policies now, and sending out the right message, will help more than hysteria

The Census Bureau estimates there are 563,055 people age 16 or older in the city who could potentially work and be part of the labor force. But only 54.3 percent of these — or 305,479 individuals — actually do participate in the labor force, meaning they either have a job or are looking for one.
Another 257,576 of Detroit residents age 16 or older — 45.7 percent of that demographic — do not participate in the labor force. They do not have a job, and they are not looking for one.

In fact, these 257,576 people in Detroit who do not have a job and are not looking for one outnumber the 224,846 residents who do have jobs. But of the 224,846 residents who do have jobs, 34,500 — or 15.3 percent — have jobs with the government. Thus, this city that boasted 1,849,568 residents in 1950 has only 190,346 private-sector workers today.

There are 264,209 households in Detroit, and 91,204 of them — or 34.5 percent — get food stamps.

Do small-business owners really fear that the re-election of President Barack Obama is worse for their businesses than the collapse of Lehman Brothers?A survey released Tuesday by the National Federation of Independent Business suggested as much. Not only did small-business sentiment plunge, but the net percentage of owners expecting better business conditions in six months fell 37 points.

President Obama argues that the election gave him a mandate to raise taxes on high earners, and the White House indicates that he won’t compromise on this issue as the so-called fiscal cliff approaches.

But tax rates are already high—much higher than is commonly understood—and increasing them will likely further depress the economy, especially by affecting the number of hours Americans work.

Taking into account all taxes on earnings and consumer spending—including federal, state and local income taxes, Social Security and Medicare payroll taxes, excise taxes, and state and local sales taxes—Edward Prescott has shown (especially in the Quarterly Review of the Federal Reserve Bank of Minneapolis, 2004) that the U.S. average marginal effective tax rate is around 40%.

It’s one reason America has been unusually slow to recover from the Great Recession. After previous recessions, employers quickly resumed hiring. Not this time. The unemployment rate is still near 8 percent. It only fell last month because people stopped looking for jobs.

Dan Mitchell of the Cato Institute understands what’s happening.

“Add up all the regulations and red tape, all the government spending, all the tax increases we’re about to get — you can understand why entrepreneurs think: “Maybe I don’t want to hire people. … I want to keep my company small. I don’t want to give health insurance, because then I’m stuck with all the Obamacare mandates.” We can see our future in Europe — unless we change. Ann Jolis, who covers European labor issues for The Wall Street Journal, watches how government-imposed work rules sabotage economies.

“The minimum guaranteed annual vacation in Europe is 20 days paid vacation a year. … In France, it starts at 25 guaranteed days off. … This summer, the European Court of Justice … gave workers the right to a vacation do-over. … You spend the last eight days of your vacation laid up with a sprained ankle … eight days automatically go into your sick leave. … You get a vacation do-over.”

Just when most people were getting used to the idea of QE3, yesterday the Fed announced QE4. When will the madness stop? In the Fed’s latest announcement it mentioned the “projected” inflation rate. This article will take a look at the TIPS expected inflation indicator to determine how long the Fed can remain accommodative under the new guidelines.

Do deficits matter? Conservatives have sometimes claimed that they don’t. Dick Cheney has said on more than one occasion that, “Reagan taught us that deficits don’t matter.” In fact, he said that to me personally once.

Supply-siders like me have often downplayed the importance of deficits, arguing as George Gilder and Jack Kemp argued in the 1980s that we can ‘grow our way out of it’. But we can only grow our way out of it if we actually grow. And if wedon’t grow, there comes a time when debt grows to the point where it really is unsustainable.

Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna Inc.’s chief executive officer said.

Nine years ago, California Democrat Gray Davis became the first U.S. governor in 82 years to be recalled by voters. The state’s 20 million taxpayers still bear the cost of his four years and 10 months on the job.

Davis escalated salaries and benefits for 164,000 state workers, including a 34 percent raise for prison guards, the first of a series of steps in which he and successors saddled California with a legacy of dysfunction. Today, the state’s highest-paid employees make far more than comparable workers elsewhere in almost all job and wage categories, from public safety to health care, base pay to overtime.

In his recent bookPresidential Perks Gone Royal, Robert Keith Gray, a former Eisenhower staffer, revealed that last year the U.S. presidency cost American taxpayers $1.4 billion. Over the same period, the entire royal family cost British taxpayers about $57 million. There’s nothing “royal” about the current level of “presidential perks”: The Obama family costs taxpayers more than every European royal house put together.

Welfare has become a characteristic of President Obama’s domestic policies. There has been a surge in American citizens on welfare over the last four years, including a 50-percent increase in people on food stamps (from 32 to 47 million). It is a form of welfareship.

As a citizen of France, I know such a society very well. France has 60 years of experience with entrenched welfare policies, beholden to a kind of “welfareship.” It is a democratic society based heavily on welfare, and distrusting the values of free markets….

Here’s another concern for beleaguered taxpayers: the next time you file a tax return that requests a refund, you could be slapped with a 20 percent penalty (not a tax) if the IRS thinks you’ve made an “excessive claim” and thereby denies the refund — even if your filing was objectively reasonable and made in good faith! The IRS is beginning to implement the regulations now.

Some economists and legal scholars have suggested that the “platinum coin option” is one way to defuse a crisis if Congress can’t or won’t lift the debt ceiling soon. At least in theory. The U.S. government is, after all, facing a real problem. The Treasury Department will hit its $16.4 trillion borrowing limit by next February at the latest. Unless Congress reaches an agreement to raise that borrowing limit, the government will no longer be able to borrow enough money to pay all its bills. Last year, Republicans in Congress resisted lifting the debt ceiling until the last minute — and then only in exchange for spending cuts. Panic ensued. So what happens if there’s another showdown this year? Enter the platinum coins. Thanks to an odd loophole in current law, the U.S. Treasury is technically allowed to mint as many coins made of platinum as it wants and can assign them whatever value it pleases.

The Federal Reserve will amplify record accommodation tomorrow by announcing $45 billion in monthly Treasury buying that will push its balance sheet almost to $4 trillion, according to a Bloomberg survey of economists.

Forty-eight of 49 economists predict the Federal Open Market Committee will purchase Treasuries to bolster an existing program to buy $40 billion in mortgage bonds each month. The panel pledged in October to continue that plan until the labor market improves “substantially.”